Recent headlines seem to suggest that an economic storm may be imminent.
Hence, it’s not surprising that investors are hunkering down to weather a potential recession.
If you’re looking for an effective way to breeze through this crisis, you can consider adding dividend-paying stocks.
Dividends not only represent a tangible return on your investment but also imply that the business behind the stock is performing well enough to dole out cash to its shareholders.
And if you’ve just received your bonus recently, it’s also a great time to park some of that money in resilient, well-managed dividend stocks.
Here are four dividend-paying stocks that I may consider allocating money to if I had S$30,000 to spare.
Food Empire Holdings Limited (SGX: F03)
Food Empire manufactures instant beverage products as well as frozen convenience and snack foods branded under proprietary brands MacCoffee, Café PHO, and Hillway.
The group’s products are sold in over 50 countries such as Russia, Ukraine and Vietnam and it operates eight manufacturing facilities.
Food Empire recently released an impressive set of earnings for its fiscal 2022’s third quarter (3Q2022) ending 30 September 2022.
Revenue jumped 42.1% year on year to US$108.6 million, with broad-based year on year revenue increases across all its regions.
Net profit soared more than six-fold from US$3.1 million to US$22.6 million.
The quarter’s net profit included a one-off gain of US$15 million from the disposal of a non-core asset.
To be sure, excluding this gain, net profit would still have more than doubled year on year to US$7.6 million.
For FY2021, the group paid out a first and final dividend of S$0.0162 along with a special dividend of S$0.0058, taking its total dividend to S$0.022.
Food Empire’s trailing dividend yield stood at 3.1%, and there is a chance that the group will raise its dividend in light of its strong results.
Valuetronics Holdings Limited (SGX: BN2)
Valuetronics is an electronic manufacturing service (EMS) company that serves the industrial and consumer electronics segments.
The group is headquartered in Hong Kong and has manufacturing facilities in both China and Vietnam.
The group’s recently released fiscal 2023’s first half (1H2023) results painted a mixed picture.
Revenue inched up 3.6% year on year to HK$1 billion but gross profit fell by 8.6% year on year to HK$131.2 million.
Net profit, however, inched up 2.2% year on year to HK$57.9 million.
The good news is that Valuetronics maintained a clean balance sheet as of 30 September 2022 with HK$979.3 million of cash and zero debt.
The EMS specialist also generated a healthy free cash flow of HK$112.7 million for 1H2023.
Valuetronics paid out an interim dividend of HK$0.04.
Coupled with its FY2022 final dividend of HK$0.1, the group’s 12-month trailing dividend came in at HK$0.14, giving its shares a trailing dividend yield of 4.3%.
The Hour Glass Ltd (SGX: AGS)
The Hour Glass Ltd, or THG, is a luxury watch retailer with 50 boutiques located in the Asia-Pacific region.
The group sells well-known Swiss watch brands such as Panerai, Rolex, and Patek Philippe.
THG reported a sparkling set of results for 1H2023, with revenue increasing by 18% year on year to S$562.7 million.
Net profit climbed 35% year on year to S$84.6 million, and the group paid out an interim dividend of S$0.02, unchanged from last year.
Together with FY2022’s final dividend of S$0.06, THG’s trailing 12-month dividend totals S$0.08, giving its shares a trailing dividend yield of 3.8%.
With THG’s strong market position and demand for Swiss watches remaining firm, the group is likely to report a healthy set of results for FY2023 and is in a good position to maintain or even increase its final dividend.
Aztech Global Ltd (SGX: 8AZ)
Aztech Global provides one-stop design and manufacturing services to blue-chip customers and technology start-ups.
The group has three manufacturing facilities located in China and Malaysia and employs 2,500 employees worldwide.
Revenue for the first nine months of 2022 (9M2022) surged by 55.4% year on year to S$606.9 million.
Net profit climbed 34.2% year on year to S$63.6 million, and Aztech Global also declared an interim dividend of S$0.03 in line with the good results.
Free cash flow for 9M2022 soared nearly 170% year on year from S$39.3 million to S$106 million.
Aztech Global’s order book stood at S$820.5 million as of 3 November after the group secured additional orders of S$37.2 million after 9M2022.
However, the group warned of geopolitical tensions and macroeconomic risks clouding the demand for consumer electronics products.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
